ACHOA Budget and Finance Committee 2019 Draft Budget ... · 10/9/2018 · This is a Budget...

ACHOA Budget and Finance Committee 2019 Draft Budget Presentation

10/2/2018 1ACHO Budget and Finance

Committee

} This is a Draft Budget for 2019 and your input tonight will assist in finalizing the 2019 Budget for Board approval at the November 6, 2018 Board Meeting. PLEASE ASK QUESTIONS.

} Once the Board approves the Budget, the Budget will be forwarded to community members for ratification at the ACHOA Membership Annual Meeting December 11, 2018

10/2/2018ACHO Budget and Finance

Committee 2

} Key questions addressed by the ACHOA Budget & Finance Committee for 2019:

◦ Should the ACHOA maintain Status Quo monthly assessments which are below the inflation level?

◦ Should the ACHOA raise monthly assessments consistently, with the expected 2.7% inflation rate?

◦ Should the ACHOA raise monthly assessment to increase the underfunded Contingency Fund (“Rainy Day Fund) from $154,000 towards two months of cash on hand which would be $417,772?

◦ Should the ACHOA continue to fund Capital Projects at $5.00 per month to add new amenities and services over time?


Committee 3

} ARROWCREEK HOA - ASSESSMENT INCREASE HISTORY (AS OF 10/9/18)

◦ 1997 to 2006: $110.00 per month assessment ◦ 2007: $221.24 per month to fund Reserve and

filed lawsuit against developer. ◦ 2009: Reduced to $205.00 per month after

developer lawsuit settled. ◦ 2013: $218 per month – Reserve Fund increase. ◦ 2018: $238 per month - increase to fund both

Operating, Capital and Reserve


Committee 4

} ACHOA Follows Zero Base Budgeting as required by NRS 116: Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new period.

} The process of zero-based budgeting starts from a "zero base," and every function within an organization is analyzed for its needs and costs.

} Budgets are then built around what is needed for the upcoming period, regardless of whether each budget is higher or lower than the previous one.


Committee 5

} This is a Budget Designed to support the Associations 2017 to 2020 Strategic Plan.

} The Seven Strategic Focus areas that follow and planned inflation rate of 2.7% were considered in developing the draft budget.


Committee 6

} Strengthen the Brand and Reputations of ArrowCreek

} Enhance the Residents’ Center

} Expand Amenities and Offerings

} Unify the ArrowCreek Community


Committee 7

} Create a Vibrant Trail System and Outdoor Fitness Circuit

} Improve the Curb Appeal of ArrowCreek through Landscaping

} Maintain Existing Roads


Committee 8

} The ACHOA is a mature community of twenty years that continuously requires updating, replacement, and repair through the Reserve Fund Budget.

} The ACHOA over time must develop new amenity offerings to maintain relevance through the Capital Fund.

} This Draft 2019 Budget includes an $8.00 per Month Assessment Operating Fund increase. ($96.00 annual cost per lot for the Operating Budget Only)

} There is no Special Assessment.


Committee 9

} Affirm the Capital Fund Expenditures for new community amenities.

} Affirm the Reserve Fund Funding and Expenses that are modified for inflation.

} Affirm the Operations Funding And Expenses that recognize fuel price increases, wage inflation, utility increases, insurance increases, material increases, and contracted vendor price increases.


Committee 10

Assessment Per Month 1,085 Members

2019 Budget Reserve Change Proposed

2018 Approved Budget

2018 ActualProjection 8-31-18

Operating Budget

$156.00 per month

$148.00 per month

$148.00 per month

Reserve Budget(Min is $)

$85.00 per month approved

$85.00 per month

$85.00 per month

Capital Projects Fund

$5.00 per month

$5.00 per month

$5.00 per month

Basic Assessment

$246.00 permonth

$238.00 per month

$238.00 per month

Sub-gate Assessment

$5.00 per month

$5.00 per month

$5.00 permonth

Sub GateMembers

$251.00 per month

$243.00 per month

$243.00 per month


Committee 11

Revenue 2019 BudgetVer 4S


2018 Projected Actual 8-31-18

Residential Assessments - $246 per month $ 3,202,920 $ 3,101,616 $ 3,100,664 Contribution to Reserves - $85 per month $ (1,106,700) $ (1,106,700) $ (1,107,720)Capital Projects - $5 per month $ (65,100) $ (65.100) $ (65,100)Gate Assessments $5 per month $ 16,500 $ 16,560 $ 16,560 Contribution to Reserves-Gates $ (5,376) $ (5,400) $ (5,400)Road Snippet Assessment-$37 per month $ 7,992 $ 7,992 $ 7,992 Contribution to Reserves-Road Snippets $ (6,912) $ (6,912) $ (6,912)AC Country Club Assessments $ 5,904 $ 5,712 $ 5,712 ADRC Submittal Fees $ 36,000 $ 29,600 $ 38,000 Gate Transponders & Clickers $ 25,080 $ 24,996 $ 19,711 Social/Recreation/Activity Fees $ 1,380 $ 1,200 $ 1,700 Room Rental Fees $ 1,200 $ 900 $ 1,300 Late Fees & Interest $ 8,100 $ 8,100 $ 8,865 Construction Penalties $ - $ - $ 500 Compliance Fines $ 3,000 $ 3,000 $ 1,625

Interest Earned - Operating Accounts $ 6,000 $ 6,291 $ 6,176 Grant Income $ 103,000 $ 25,000 $ -

Total Revenue $ 2,232,988 $ 2,045,835 $ 2,023,668


Committee 12

Expense Department(Details Provided Latter in Presentation)

2019 Draft Budget Vers. 4S


2018 ProjectedActual 8-31-18

Administration $ 75,670 $ 90,410 $ 84,801 Communications $ 36,000 $ 35,900 $ 42,924 Payroll & Benefits $ 1,318,086 $ 1,320,708 $ 1,086,767 Insurance $ 88,990 $ 86,512 $ 77,141

Utilities $ 196,150 $ 187,680 $ 175,989

Landscaping $ 38,000 $ 38,000 $ 41,175

Operations $ 36,400 $ 36,018 $ 30,557

Contracted Svcs. $ 142,800 $ 107,600 $ 90,931

Repair & Maint. $ 289,390 $ 279,680 $ 262,035

Professional Svcs. $ 283,900 $ 285,500 $ 257,745

Taxes $ 1,200 $ 1,200 $ 783

Total Expenses $ 2,506,636 $ 2,469,208 $ 2,156,848


Committee 13

Capital Projects Revenues and Expenses

2019 Draft Budget Ver 4S



Revenues Budget Revenue $5.00 per month $ 68,100 $ 65,220 $ 69,891

Balance Sheet Surplus $ 354,130 $ 375,000 $ 350,000

Total Revenue and Cash $ 422,230 $ 440,220 $ 418,891

Expenses

Equipment Depreciation $ 43,200 $ 43,200 $ 33,262

Vehicle Depreciation $ 24,000 $ 24,000 $ 22,000Total Depreciation – Non Cash $ 67,200 $ 67,200 $ 55,262


Committee 14

Expense Department 2019 Draft Budget Ver 4S



Capital Project - Other Projects # 2 $ 2,520 $ 15,000 $ 3,333Capital Project - Fire Access Gates at Harbottle Park parking area # 1 $ 20,000 $ 0 $ 0

Capital Project - Website Development # 3 $ 8,000 $ 10,000 $ 11,000

Capital Project - Marketing & Public Relations # 3 $ 6,000 $ 0 $ 2,250

Capital Project - Toro Workman MDX Gas 16HP # 2 $ 14,239 $ 0 $ 0Capital Project - Riding or Stand Up Lawn Mower $ 0 $ 0 $ 13,244Capital Project - Park Benches Bust Stops & Concrete Pads # 2 $ 4,500 $ 0 $ 0Capital Project - Playground Remodel & Upgrade Residents Cntr # 1 $ 20,000 $ 0 $ 0Capital Project - Wind Screens for Pickle and Tennis Courts # 2 $ 5,000 $ 0 $ 0Capital Project - Seating Areas Pickle Ball and Tennis # 3 $ 10,000 $ 0 $ 0

Capital Project - ADA Chair for Swimming Pool # 3 $ 7,500 $ 0 $ 0Capital Project - Master Hiking Trail # 1 $ 10,000 $ 0 $ 5,000Capital Project - Improvement Studies # 3 $ 3,000 $ 12,000 $ 5,000Capital Project - Res. Center Planning # 3 $ 6,000 $ 50,000 $ 8,003

Total Expenses without Depreciation $ 117,359 $ 87,000 $ 57,530


Committee 15

Operating and Capital Revenues and Expenses

2019 Draft Budget Ver 4S



Total Revenue and Cash $ 422,230 $ 440,220 $ 418,891Total Expenses without

Depreciation$ 117,359 $ 87,000 $ 57,530

Surplus or (Loss) $304,871 $353,220 $361,361

Operating Revenue $ 2,232,988 $ 2,045,835 $2,023,668

Total Expenses $ 2,506,636 $ 2,469,208 $2,156,848

Surplus or (Loss) ($273,648) ($423,373) ($133,180)

Total Capital and Operating Surplus or (Loss)

$31,223 ($70,153) $228,181


Committee 16

} In the past the Board has maintained a Contingency Fund (“Rainy Day Fund”) of two months projected expenses as recommended by the Independent Accounting firm to avoid Special Assessments.

} Two months would equal $417,772.

} As of September 30, 2018 the sum is actually $154,000 which was depleted to handle the Emergency Drainage Projects this year.

} Surplus Funds from 2018 and projected 2019 can be used to build up the Rainy Day Fund.


Committee 17

} The Browning Update Reserve Fund Report for 2019 has not been published pending the updates and all the road work completed for 2018.

} The 2018 Road Work Projected funded by the Reserve Fund encountered higher material and labor costs than expected.

} An updated report will be reviewed and approved at the November Board Meeting.


Committee 18

} The Reserve Committee will evaluate planned work for the next five years to maintain a minimum of 50% Funding level in an attempt to not raise assessments in 2019. There are no guarantees until the full update has been analyzed.

} The report will be published shortly. Therefore the following reflects the information from the 2018 report.


Committee 19

Description 2017 2018 2019 2020 2021 2022

Beginning Balance 6,705,926 7,305,038 5,283,6645,645,800 4,633,604

New 5 Yr.

5,262,245

2.5% Inflated Expenditures * 552,922 3,162,296 765,820 2,265,394 645,956 1,756,304

Reserve Contributions 1,042,560 1,042,560 1,042,560 1,172,880 1,197,276 1,222,179

Lots/Month1,086 80.00 85.00 85.00 90.00 91.87 93.78

% Increase 0% 6.25% 0% 5.6% 2.1% 2.1%

Net Interest * 109,474 98,361 85,397 80,318 77,321 78,674

Ending Balance 7,305,038 5,283,664 5,645,800 4,633,604 5,262,245 4,806,794

Fully Funded Balance * 9,278,472 9,843,574 8,432,166 9,178,881 8,302,526 9,110,741

Funded % 78.7% 53.7% 67.0% 50.5% 63.3% 52.8%


Committee 20

} ACHOA Members are required to pay for the life of the assets that have been consumed by 12-31-2019 and future ACHOA Members need to pay the life of the assets consumed in the future.

} Present Cost to replace 100% of all ACHOA assets is $22,232,009 and Estimated Future Replacement Cost is $27,316,425.


Committee 21

} The Big Four Projects have increased the actual expenditures in 2018. [Roads, Drainage, Resident Center Refresh, Landscape]

} 2019 actual paid projection subject to further review is at $3,620,394 as reflected in August 2018 statements.[$3,925,955 - 2018 Budget]

} However, Reserve Monthly Assessment remains the same. $85.00 per month per lot at this time.


Committee 22

Categories 2019 Budget Ver 4S


2018Projected as of 8-31-2018

Description

Administrative $ 24,570 $ 45,210 $ 33,345

Communications $ 25,580 $ 26,400 $ 32,075

Insurance $ 60,000 $ 60,000 $ 55,122

Operations $ 6,000 $ 6,000 $ 5,483

Professional

Services$ 277,600 $ 273,800 $ 238,531

Property Taxes $ 1,200 $ 1,200 $ 0

Total Admin Exp. $ 395,170 $ 412,610 $ 361,556


Committee 23

Categories 2019 Budget Vers 4S

2018 Approved

Budget

2018Projected As of 8-31-2018

Description

Administrative $ 5,200 $ 5,200 $ 5,973

Payroll & Benefits $ 639,625 $ 622,525 $ 499,808 2 New FTE

Workers Comp $ 7,500 $ 7,500 $ 6,049

Auto Insurance $ 4,800 $ 2,724 $ 2,482 Insurance Increase

Utilities $ 112,700 $ 112,700 $ 110,562 Water rates increase

Landscaping $ 38,000 $ 38,000 $ 41,175

Operations $ 1,500 $ 1,500 $ 711

Contracted Services $ 142,800 $ 107,600 $ 96,931 Fuels Prevention

Repair & Maintenance $ 206,726 $ 201,216 $ 178,597 Vacuum Truck & Snow

Professional Services $ 6,000 $ 9,000 $ 6,000 Drainage

Total Facilities $ 1,164,851 $ 1,107,965 $ 948,288


Committee 24


2018 Approved

Budget

2018Projected as

of 8-31-2018

Description

Administrative $ 38,000 $ 33,000 $ 40,461

Communications $ 3,600 $ 3,600 $ 3,077

Payroll & Benefits $ 95,998 $ 94,257 $ 85,770

Workers Comp. $ 1,419 $ 1,413 $ 966

Utilities $ 62,470 $ 58,200 $ 49,823 Water rates

Operations $ 2,100 $ 1,718 $ 1,644 Repair and

Maintenance$ 59,600 $ 56,000 $ 55,780

Taxes $ 25 $ 25 $ 19

Total Expenses $ 263,212 $ 248,213 $ 237,540


Committee 25


2018 Approved

Budget

2018Projected as

of 8-31-2018

Description

Administrative $ 3,000 $ 2,400 $ 3,265

Payroll & Benefits $ 582,463 $ 603,926 $ 501,189 Turn over

Insurance $ 15,271 $ 14,875 $ 12,522

Utilities $ 14,200 $ 14,200 $ 9,644

Operations $ 26,800 $ 26,800 $ 22,719

Repair &

Maintenance$ 18,504 $ 17,904 $ 16,375

Total Expenses $ 660,238 $ 680,105 $ 565,714


Committee 26


2018 Approved

Budget

2018Projected as

of 8-31-2018

Description

Administrative $ 4,900 $ 4,600 $ 4,757

Communications $ 4,800 $ 3,800 $ 5,500

Repair & Maint. $ 600 $ 900 $ 300Professional

Services$ 26,700 $ 26,700 $ 24,589

Total Expenses $ 37,000 $ 36,000 $ 35,146


Committee 27

Categories 2019 BudgetVers 4S

2018 Approved

Budget

2018Projected as

of 8-31-2018

Description

Utilities $ 6,780 $ 6,540 $ 6,532

Repair &Maintenance $ 4,560 $ 4,560 $ 11,283

Total Expenses $ 11,340 $ 11,100 $ 17,815


Committee 28

} This draft will be further amended based upon input from the Board, Budget & Finance Committee Members and ACHOA lot owners in attendance tonight.

} Version Five will be close to the Final Version that will be recommended to the Board at the November Board meeting.

} Thank you for your input and questions.


Committee 29

ACHOA Budget and Finance Committee 2019 Draft Budget ... · 10/9/2018 · This is a Budget...

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